DOI Puts $1.7M Toward Fraud Fight

The California Department of Insurance has granted $1.7 million to county-level prosecutors for combating what it says is an increasing number of health and disability frauds.

The grants went to six mostly urban counties in Northern and Southern California, including Los Angeles, Orange and San Diego Counties. They range in size from just over $106,000 to more than $611,000.

“California’s strained economy has resulted in an increase in insurance fraud schemes. Local district attorneys often have fewer resources at their disposal to fight fraud,” said California Insurance Commissioner Dave Jones. “These additional funds will assist district attorneys across the state in the ongoing fight to combat these types of fraud.”

Insurance Department spokesman Dave Althausen noted that most of the frauds seen by his office have been carried out by individuals, primarily seeking to collect payments from disability or workers’ compensation insurers. He added that occasionally there is fraud involving medical groups or other providers.

The Obama Administration has said that Southern California is one of the nation’s hotspots for healthcare fraud. The U.S. Department of Health and Human Services has held two workshops in the region on the topic since 2010. 

Federal prosecutors have also announced numerous arrests in California, primarily providers submitting bogus claims to the Medicare program.

The Department of Insurance collects money for the grants in the form of a 10-cent per person assessment for every individual enrolled in a group health or disability plan, collected from paid premiums.

Legislation is currently pending that would increase the current 10-cent-per-person assessment to 20 cents, DOI officials said.

According to DOI data, every $1 it contributes toward fraud initiatives leads to $94 worth of prosecutable charges.